Eagle Laundry v. Fireman's Fund Insurance

2002 NMCA 056, 46 P.3d 1276, 132 N.M. 276
CourtNew Mexico Court of Appeals
DecidedApril 5, 2002
Docket21,791
StatusPublished
Cited by7 cases

This text of 2002 NMCA 056 (Eagle Laundry v. Fireman's Fund Insurance) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Eagle Laundry v. Fireman's Fund Insurance, 2002 NMCA 056, 46 P.3d 1276, 132 N.M. 276 (N.M. Ct. App. 2002).

Opinion

OPINION

ROBINSON, Judge.

{1} This appeal arises out of a district court order confirming an arbitration decision. Eagle Laundry, Inc. (Eagle) appeals from the order granting Fireman’s Fund Insurance Company’s (Fireman’s) application for confirmation of arbitration decision. On appeal, Eagle contends that the district court erred in (1) determining that the parties agreed to binding arbitration and confirming the arbitration award when there was no written arbitration agreement, (2) confirming the arbitration award without holding an evidentiary hearing on issues Eagle claims would have supported vacating or modifying the award, and (3) not allowing the issue of whether the parties agreed to binding arbitration to be submitted to a jury for trial.

{2} We hold that New Mexico recognizes common law arbitration, which does not require a written agreement, and that Eagle waived whatever issues it had regarding a written agreement by participation in the arbitration without objection. Eagle also waived any issues about vacating or modifying the award by not objecting to the district court’s failure to take evidence on the matters. We further hold that a jury trial is not available in proceedings on motions to confirm arbitration awards. We therefore affirm.

FACTS and PROCEDURAL BACKGROUND

{3} In June 1992, Eagle made a claim to Fireman’s for insurance coverage for property damage caused by leakage from underground gasoline storage tanks. Eagle claimed that the damage was caused by “vandalism” and, therefore, covered under its policy with Fireman’s. Fireman’s investigated the claim and concluded that the damage was not caused by vandalism, so Fireman’s denied the claim.

{4} In early 1993, Eagle proposed to Fireman’s that the dispute be resolved by arbitration, with former District Court Judge Louis DePauli acting as arbitrator. A letter from Fireman’s to Eagle indicated that if the arbitrator found in favor of Eagle that Fireman’s would “pay all costs.” Judge DePauli held a pre-arbitration conference with the parties. Judge DePauli and a Fireman’s representative later testified that the parties agreed at this meeting that the arbitration would be binding. The day after the meeting, Fireman’s confirmed this understanding by sending a letter to Judge DePauli, with a copy to Eagle’s attorney. The letter also confirmed that the arbitration would address the issue of coverage for Eagle’s damages under the Fireman’s policy.

{5} Eagle did not respond to the letter or otherwise indicate a contrary understanding about the binding nature of the arbitration. Eagle’s attorney sent a letter to Fireman’s discussing scheduling for the arbitration, informing Fireman’s that the arbitrator had requested damages information, and inquiring whether there were “any other details which we need to cover.” Several months later, Eagle’s attorney again wrote to Fireman’s about scheduling the arbitration. In late 1994, Eagle’s attorney sent a message to Fireman’s requesting a January 1995 arbitration date and stating: “Both parties want to bring the matter to a conclusion.”

{6} From late 1994 until the afternoon before the arbitration took place, the parties attempted to settle the dispute. However, the parties were unable to reach an agreement, and the arbitration took place before Judge DePauli on January 20, 1995. The attorneys for and representatives of both Fireman’s and Eagle attended the arbitration and participated fully in it without objection.

{7} Judge DePauli stated in an affidavit and testified at the confirmation hearing that, as was his practice for all arbitrations, at the beginning of the arbitration he asked the parties to confirm that the arbitration was binding and they did so. Judge DePauli also stated in his affidavit and testified at the hearing that if the parties had not agreed the arbitration was binding, he would not have presided over it because he believed it would have been a waste of time for himself and the participants.

{8} Eagle’s attorney did not object to proceeding without a formal written arbitration agreement, and at the confirmation hearing he denied ever stating that Eagle thought the arbitration was non-binding. Eagle’s president, Tom Sundaram (Sundaram), stated in an affidavit and testified at the confirmation hearing that he objected to the arbitration proceeding without a written agreement and that he contended the arbitration would not be binding.

{9} Sundaram’s testimony on this issue conflicted with the testimony of the other witnesses. Other participants, including Eagle’s attorney, testified that Eagle did not object to proceeding to arbitration without a written agreement, and that Eagle did not attempt to establish that the arbitration was non-binding once the arbitration began.

{10} At the arbitration, Judge DePauli heard testimony and considered exhibits and arguments presented by both sides as to insurance coverage and damages. Eagle’s attorney testified at the confirmation hearing that the issue of coverage was fully litigated at the arbitration proceedings. Judge DePauli issued a decision expressly stating that the parties had agreed that the arbitration was binding, and ruling that Eagle’s claim was not covered by the Fireman’s policy because it was not caused by vandalism. Eagle then filed a motion for clarification, reconsideration, or rehearing and sought leave to submit additional evidence to the arbitrator. In this motion, Eagle objected to the lack of a written arbitration agreement but did not argue that the arbitration was nonbinding.

{11} Subsequently, Sundaram submitted additional arguments, which contended for the first time that the arbitration was not binding. Judge DePauli held a hearing on January 30,1995, on the motion for reconsideration, including Eagle’s objection to the lack of a written agreement to arbitrate, and on its argument that the arbitration was not binding. Judge DePauli denied Eagle’s motion. The parties each paid half of the costs of arbitration.

{12} On February 22,1995, Fireman’s filed a motion to confirm the arbitration decision in district court. Eagle’s answer denied that there was an agreement to arbitrate, contended that the decision was not drafted with sufficient specificity, and stated that its counsel “should have stopped [the] entire proceedings before the arbitrator without a written arbitration agreement but neglected to do so.” Eagle also requested that the decision not be confirmed because it exceeded the scope of the issues presented, it did not address the primary issue, and the arbitrator was biased.

{13} On July 28, 2000, the trial court held an evidentiary hearing at which the parties offered exhibits and presented their own testimony and that of their attorneys and the arbitrator. The parties submitted proposed findings and conclusions. The district court entered an order confirming the arbitration decision and entered findings of fact and conclusions of law denying Eagle’s motion for reconsideration. This appeal followed.

STANDARD OF REVIEW

{14} “In reviewing the determination of a lower court affirming an arbitration award, this Court is restricted to evaluating whether substantial evidence in the record supports the district court’s findings of fact and application of law....” Medina v.

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Cite This Page — Counsel Stack

Bluebook (online)
2002 NMCA 056, 46 P.3d 1276, 132 N.M. 276, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eagle-laundry-v-firemans-fund-insurance-nmctapp-2002.